Money Menu's first issue and rewards for subscribers!

MENU METRICS 🥞
These numbers may surprise you

• 57% of Americans can’t afford a $1,000 emergency expense.

• $188 is the average annual cost of a $500,000 20-year term life insurance policy for a 30-year-old woman. The cost at the same terms and age for a man is a little higher at $221.

• 60% of Americans don’t have a retirement account.

DEEP DISH 🍕
Securing your financial future in 2024 and beyond

Have you ever found yourself wondering about the stability of your financial future? Imagine a scenario where you suddenly face an unexpected expense – how would you handle it? Financial planning isn't just about numbers; it's about securing peace of mind for you and your loved ones. In this deep dive, we'll explore five essential questions to help guide your financial journey.

1. Do I Have an Emergency Fund in Case Something Unexpected Happens?

Emergency funds are the unsung heroes in our financial lives, stepping in when life throws a curveball. Whether it's a job loss, an unexpected medical bill, or an urgent home repair, these events often occur without warning.

Key Points:

• Financial experts recommend an emergency fund covering 6 months of expenses.

• For monthly expenses of $3,000, aim for a fund of $18,000.

• Store your funds in a high-yield savings account that’s easily accessible and not tied up in investments.

Actionable Tip: Start small if necessary. Even saving a little each month can build a significant buffer over time.

2. What Is My Debt-to-Income Ratio?

Your debt-to-income (DTI) ratio is a quick health check of your financial well-being. It's the percentage of your gross monthly income that goes towards debt payments.

Example: With a monthly income of $6,000 and debt payments totaling $2,400, your DTI is 40%. Aim for a DTI below 35%, or below 28% if you’re planning to buy a home.

Actionable Tip: To improve your DTI, focus on reducing debt and, if possible, increasing your income.

3. Have I Set My Loved Ones Up for Financial Success?

Benjamin Franklin famously said, "In this world, nothing can be said to be certain, except death and taxes." It’s a sensitive subject, but ensuring your loved ones are financially secure after you're gone is a crucial aspect of planning.

Key Points:

• A life insurance policy can provide for your family after your passing.

• Financial experts often recommend a policy worth 10 times your annual income.

4. Am I Investing Enough into My Retirement Fund?

Retirement planning is critical, and the sooner you start, the better, thanks to compound interest.

Key Points:

• Aim to save at least 10% of your income for retirement.

• Follow the 4% rule: Ensure you can live off 4% of your retirement fund annually.

Actionable Tip: If your employer offers a matching contribution, take full advantage of it as it counts towards your retirement saving goal.

5. Where Do I Want to Be Financially in 3, 5, and 10 Years?

Setting clear financial goals can keep you motivated and on track. Whether it's being debt-free, owning a home, or saving for a dream vacation, each step you take today brings you closer to your aspirations.

Actionable Tip: Break down your goals into manageable steps and review them regularly.

Remember, personal finance is just that – personal. Your journey is unique, and these questions can guide you to a future of financial security and peace of mind. Take the first step today towards a brighter, more secure tomorrow.

SWEET LINKS 🍰
Digital bites we think you’ll like

• Retirement calculator — Estimate how much you need at retirement

• Watch & discuss — Video on the psychology of money (20 mins)

• Networth & chill — A podcast by former Wall Street trader, Vivian Tu, discusses how money impacts all of our lives

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